HNA Group's shares and unit bonds rose on Thursday after sharp declines, following the carriers' ongoing moves that aim to rebut market rumors of a capital crunch and reassure investors that it is financially sound.
Shares of HNA Holding Group, the Hong Kong-listed arm of HNA Group, closed at HK$0.365 ($0.05) on Thursday, up 7.35 percent, marking the largest daily gain in percentage terms since November 15.
The reversal came after the group held a meeting with representatives from eight Chinese banks, including China Development Bank and the Bank of China, on Wednesday about providing credit support to the group in 2018.
"Executives from those financial institutions said that all of HNA's businesses have been developing relatively well, and the group has played an important role in the economic development not only of [South China's] Hainan Province but also around the country," said a statement the company sent to the Global Times on Wednesday.
The group also stressed in the statement that it has maintained "normal and good working relationships" with major financial institutions in China and abroad.
The group has more than 800 billion yuan ($121.07 billion) in credit lines from various financial institutions, with 310 billion yuan unused, according to the statement.
As market rumors concerning HNA's mounting debt and strained liquidity circulated on Chinese social media, the meeting was intended to send a signal to "persuade lenders and investors that it is financially sound" and reinforce their confidence, the Wall Street Journal reported on Wednesday.
In recent days, several posts allegedly showing notices of HNA's failure to repay loans to banks went viral on the Internet. Although the authenticity of the documents hasn't been verified, the postings sent down the share price of HNA-related units and bonds.
Adding fuel to the fire was that several subsidiaries of the HNA group had sought to raise capital through issues of short-term bonds, which triggered investors' concern on HNA's surging financing cost, ifeng.com reported on Thursday.
At a meeting on Wednesday, the State Council, China's cabinet, vowed to strengthen supervision of State-owned assets and overseas merger and acquisition (M&A) deals, sina.com reported the same day.
Chinese authorities have tightened grips on domestic capital outflow for overseas M&A this year, which may hamper the group's domestic financing channels, prompting another investors' concern.
HNA has embarked on a debt-fueled global shopping spree in recent years. The company has spent at least $40 billion in overseas acquisition deals in sectors such as tourism, logistics and banking, according to the ifeng.com report.
